As the population ages, there might come a time where you presume that providing financial support to your elderly parents will become obligatory and you will need to be step in and assist with their finances. The senior years can be financially challenging and consequently many elderly Canadians turn to their family members for support. That can cause a significant financial strain and it tends to grow if there are not other support and assistance. It is generally observed when many Canadian seniors are thought to take pleasures of their retirement; they are instead worrying about their finances.

A research conducted by Financial Planning Standards Council found that about 45% seniors have at least one financial concern. A quarter of them fear that they will run out of money before they die however another quarter worries about not being able to pay for the long-term care needs.¹

“Seniors are not prepared. Their golden years are in fact quite tarnished,” said financial educator Kelley Keehn.¹

WHY PLAN EARLY?

One of the biggest issues observed for aging population is the evasion of financial conversation between elderly parents and their adult children. This dilemma creates uncertainty and prevents hands-on planning for later support in older time. It is also believed that aging adults could be benefited from supportive solutions like retirement community living but only when they understand the costs, their finances and resources. The first step is to have a financial conversation with their children or some financial planner, such as a CFP professional. An adequate planning for future support will help empowering aging population to have the quality lifestyle they want in their retirement and it will bring peace of mind to their families as well.

It is significant that family members and elderly parents get involved in financial planning for future needs. Another factor is that financial resources can change considerably if there is any kind of illness, stroke, and onset of dementia. To plan financially for long term care needs, the first thing to know is the costs of services.

It is commonly observed that many seniors assume that they have planned for their future properly only to discover later that the rising medical costs, investments damages and a lot more factors have pushed them into debt. Consequently, most seniors have to skimp on food budgets or sacrifice getting medications for them to meet the ongoing payments.

Another important issue which most of the seniors have to face is that though their retirement age starts at 58 or 60 whereas the life expectancy can be stretched to 80 and above. Hence, the main issue is to making a financial planning for seniors that can ensure a considerable fixed income every month and can cover more than their monthly expenses.

GETTING HELP

As it is evident that Financial Planning for aging population can be very difficult, considering the facts that you aren’t sure when you will need long term care and for how long it will be needed. However, some living situation requirements can be determined. You or your aging loved one have worked hard your entire lives and managed your livings. It would have been impractical to predict the expensive medical care, rising costs of prescription or depletion of savings. However, there are professionals who are up-to-date with changes in laws, economy and government programs for the seniors. These experts are equipped to handle almost everything from investment advice, retirement savings accounts, estate planning, guidance on government programs and new supportive funding alternatives.

FINANCIAL SUPPORT FOR AGING POPULATION

Apart from managing their own funds for adult years, many seniors in Canada have to take financial help and support from the Government. The following are the Federal Support Programmes that may aid to supplement the retried living to aging population:

Canada Pension Plan (CPP) Retirement Pension²

The Canada Pension Plan is one of two social insurance programs that form the country’s public retirement income system—the other program being Old Age Security. CPP is available to adults 65+ upon enrollment and is based on how long and how much you have contributed to the program during your time of employment. The amount of your CPP retirement pension depends on different factors, such as:

the age you decide to start your pension
how much and for how long you contributed to the CPP
your average earnings throughout your working life

For 2020, the maximum monthly amount you could receive as a new recipient starting the pension at age 65 is $1,175.83. The average monthly amount in 2019 was $679.16.Your situation will determine how much you’ll receive up to the maximum.

The process of acquiring CPP is started once your application is submitted with your completed application form. It will take:

7 to 14 days for online applications
normally within 120 days for applications delivered at a Service Canada Centre
normally within 120 days for applications sent by mail

Old Age Security (OAS) Pension³

The Old Age Security (OAS) program is the Government of Canada’s largest pension program. It is funded out of the general tax revenues of the Government of Canada. This means that you do not pay into it directly. OAS pension is a monthly payment available to seniors aged 65 and older who meet the Canadian legal status and residence requirements. You may need to apply to receive it. It is worth mentioning here that low-income adults may be eligible to receive OAS by age 60.

Your employment history is not a factor in determining eligibility: you can receive the Old Age Security (OAS) pension even if you have never worked or are still working.

If you are living in Canada, you must:

be 65 years old or older
be a Canadian citizen or a legal resident at the time we approve your OAS pension application, and
have resided in Canada for at least 10 years since the age of 18

Guaranteed Income Supplement (GIS)⁴

The Guaranteed Income Supplement (GIS) provides a monthly non-taxable benefit to Old Age Security (OAS) pension recipients who have a low income and are living in Canada. GIS is paid if you meet all of the following conditions:

You are receiving an OAS, and
Your annual income (or in the case of a couple, your combined income) is lower than the maximum annual benchmark.

Allowance for the Survivor⁵

This allowance is a benefit available to people aged 60 to 64 who have a low income and meet the following criterion:

You are aged 60 to 64 (includes the month of your 65th birthday);
You are a Canadian citizen or a legal resident;
You reside in Canada and have resided in Canada for at least 10 years since the age of 18
Your spouse or common-law partner has died and you have not remarried or entered into a common-law relationship; and
Your annual income is less than the maximum annual threshold.

Federal Attendant Care Tax Certificate⁶

This facility or assistance enables elderly to claim medical expenses costs for attendant care. This also includes share of the salaries and wages paid to all employees in an establishment (other than full-time care in retirement and care homes) carrying out the following duties:

Food preparation
Housekeeping and laundry services
Health care
Activities (social programming)
Salon services (hairdressing, manicures, pedicures) if included in monthly fee
Transportation (driver)
Security for a secured unit

Apart from the above mentioned Federal Schemes, there are also many programmes offered under the Provincial Financial Support for seniors (from renovation tax credits to tax relief programs). For further details on these, we will be sharing another blog ahead.

References:

Even though there are numerous publicly funded health care services in Ontario, a lot of individuals do not qualify for this service. Due to the high cost and long wait times to receive these services, many individuals opt for private home health care services in Canada.

The first step towards finding an effective home health care service would be to determine the level of care that is needed. Home care services are divided into two main categories: Skilled care; which takes care of any medical needs or custodial care; which takes care of the personal wellbeing (such as cooking, cleaning, taking care of personal hygiene) of the supported individual.

Choosing a home health care services can be tricky and take up a lot of your time. A bunch of factors needs to consider, such as pricing of the service being provided, accreditation of the service provider, which makes the process even harder. To ensure that you choose the best professional healthcare services, you would also need to make sure that the organization you are choosing is trustworthy, reputable and practices appropriate hiring policies.

health care services

Professional Home health care agencies in Canada have been booming rapidly in the past years. When deciding to go forward with a home care provider, make sure that the provider is-

Licensed by the state- You should look for a home health care service provider that has been accredited. This will mean that the provider has been properly accessed and validated to exercise best practices and have a high standard.
Has good ratings and reviews- Use social media to find out more about the company. A company that low scores and ratings should raise a red flag for you. You should also read the comments posted by people sharing their experience with the health care provider.
The agency appropriately trains and monitors staff- Make sure that the policies and procedures set in place to hire the health care providers are proper. These policies and procedures reflect the care you will likely receive. Ask the health care providers if they perform criminal screening checks, health screening checks, verify the accreditation of their staff, etc.
Dependable- make sure that the health care provider is easily accessible and approachable. They should be available around the clock 24/7 to cater to your needs.

Another important factor when choosing a professional home health care agency can be the pricing of the service. As important as this factor may be, pricing shouldn’t be the main factor when deciding on a home health care provider. The most important factor to e considered should be the company’s’ market value, its policies and procedures as well as the level of satisfaction that can be provided by them.

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Financial Planning and Support for Aging Population